What privileges do I get for my 5%?
Only asking, cos I get fuck all for the tax I currently pay.
What privileges do I get for my 5%?
Yes, but those at least give people savings which they would not have, which is a retirement fund. My mother would have literally nothing to live on if it weren’t for social security. I’d rather have a more robust payroll/SS program and do away with the sales taxes. And expand the cap to at least a quarter million for payroll/SS.
I’d expect the vast majority of the working poor do not get health care via their job, though. I’d much rather that be going to a state funded health care program that we can all access for free or cheap at the point of care.
I’m okay with taxation that goes towards social programs that benefit all of society, especially those who are the least well off.
Payroll tax is more than just SS, and the way SS is framed as retirement savings (by the government) seems disengenious to me. Garnishing the wages of the lowest earners to pay for our social safety net (such as it is) is just wrong. Especially while exempting the highest earners from contributing at all (capital gains aren’t subject to any payroll taxes, the highest earners derive their income through capital gains).
Everyone deserves access to housing, food, and healthcare regardless of how much they ‘chipped in’ during their time in the labor pool. I mean, the money is already there to provide this, we just spend it on war and oppression instead.
I’m ok with taxes generally too, but the payroll tax game sucks for workers.
The other sneaky little thing about payroll taxes is that they only apply to wages. If your income is in the form of rents, dividends and interest (i.e. returns on capital, rather than labour) then you don’t pay at all.
Exactly my point!
Though I seem to have forgotten to mention that particular bit earlier, thank you!
Ah, I thought that you were talking specificity about the earnings cap on the payroll / social security taxes which act as a give-away to the highest earners. See- the system is so even-handed it creates loopholes for the Petite bourgeoisie as well as the Capitalist.
I don’t think the effect on global warming is nearly as clear. A less in person office culture is likely to disincentivize using high price downtown real estate. This is likely to lead to further suburbanization of people who have to be in the office. You’ll also see a lot of people who currently choose to live close to current office spaces instead relocate to cheaper suburban or rural areas, then requiring more high carbon last mile shipping and longer trips for non work travel. You’ll also see the further financial erosion of public transit systems as they lose more riders of choice, probably resulting in more trips occurring by private car.
Or we could see an increase in affordable, medium-density housing in city centres, as companies stop building offices on every available square foot of land and as real-estate prices fall as a result. The return of the city centre as a place for people as people, rather than as employees.
Its certainly possible, but the history of real estate in cities that have a big commercial real estate collapses makes me think that is less likely. After the bubble burst in the commercial real estate market in downtown Cleveland, in the late 80s, the rate of sprawl in the region exploded. Omaha saw something similar with other bust periods. Either way I don’t think the outcome is clear enough to list it as an obvious addition to the list of reasons the DB plan is absurd.
Yet my mother isn’t out on the street, so…
Which is why everyone should pay into it.
Then we fix it, not abandon it. The problem isn’t the people paying into it, it’s the people who can exempt themselves from it.
Payroll tax is, by it’s nature, regressive on workers. If it applied to all income instead of payroll (everyone pays) it wouldn’t be a payroll tax anymore, it would be income tax.
Pretty sure we are on the same side here
The government doesn’t frame it that way. The state still calls it what it was originally intended to be: Social Security insurance. The programme was never intended to be retirement savings, but to ensure that elderly people would not end up sleeping in alleys and eating out of trash cans if their savings and pensions are wiped out (as many had to after the crash of 1929).
Since FDR’s government had a sense of fairness, it made sure that if you paid into the insurance pool (taking advantage of the economy of scale associated with paycheque deductions) you’d get the insurance benefits as a retirement supplement even if the worst didn’t happen. But since FDR’s government also wasn’t (as its conservative opponents claimed) “socialist” but was still operating under and preserving capitalist assumptions there was still an expectation that people would have other traditional retirement funds: personal savings and/or corporate pensions. Social Security wasn’t and isn’t presented as a state pension but as bare-bones insurance or a supplement.
For about 40 years, that system worked as intended. Starting in the early 1970s, though, real wages for most workers began to stagnate – a situation that continues to this day. It became harder and harder for most workers to build secure personal savings. Then, starting in the 1980s, neoliberal GOP governments (and neoliberal-lite Dem ones) began a two-pronged effort to eliminate the security of traditional pensions: trade unions – a traditional vehicle for worker-friendly pensions – were attacked through so-called “right to work” laws; and defined benefit retirement plans provided by corporate employers were replaced by riskier (and more easily abused) 401(k) plans.
All of this meant that Social Security became a de facto retirement savings plan, not because the state declared it so but because the dominance of neoliberal economic philosophy over the past 40 years gives workers (most of whom now don’t have enough savings to cover a $400 emergency, let alone retirement) no other choice but to think of it that way.
So as much as no-one likes to see FICA payroll deductions, let’s not buy into the disingenuous conservative narrative about Social Security (one of several) that it’s the bad ol’ state that frames it as retirement savings.
Most mandatory insurance-pool fundraising mechanisms are – they don’t work without the scale that delivers. As @mindysan33 notes, there are ways to make that situation more equitable, both in terms of collection and application of revenues, without eliminating the mechanism itself. Also, pool-building payroll taxes are usually not barely-disguised cash grabs meant to benefit private corporations like this proposed one is.
Not really. The way this works in practice is that the social security payments deducted today from the pay checks of young, able-bodied, working people are not stashed away somewhere to support them in their old age, but are paid out practically immediately to those other people who are old, decrepit, and not working anymore right now. This is usually called an “intergenerational contract”. It isn’t a bad idea in principle and does what it is supposed to do as long as the young, able-bodied, income-earning people sufficiently outnumber the old, decrepit, non-working people, and there is a reasonable expectation that by the time you are old and decrepit and no longer contributing, there will be enough new young income earners paying in so that there is enough money available to give the old and decrepit like you a nice regular payout. Everybody is happy.
Where it becomes problematic is (a) when the ratio of contributors to beneficiaries changes – mostly by people having fewer kids per family – to a point where the sum of the money raised from the contributors isn’t enough to cover what the beneficiaries are supposed to receive (in which case either the deductions must increase, the payouts must decrease, an alternative source of additional money must be found, usually non-payroll taxes, or a combination of the three), and (b) if the government of the day decides to divert some of the social-security money to other purposes, which increases the problems outlined in (a).
The difference between this and a big piggy bank is that in theory it can’t run out, but in practice there is no guarantee that the sum total of what you get out will bear any relation to the sum total of what you paid in. Also, unlike the content of your piggy bank, your kids don’t get to inherit it when you shuffle off this mortal coil, which is especially irksome if, for whatever reason, you keel over a week after you retire from your job.
Once again, I did not argue it was perfect, just that it actually fucking works. However, ending a program that’s popular and saves lives will be a catastrophe. Reform is in order, but JFC, how about we NOT end a program that works to keep old people off the fucking streets!
Yes, but part of payroll also comes from employers as well. It’s not just on the employees here. Is a pension also regressive?
A government back saving plan is a good idea, doubly so since the firewall between commercial and investment backing have completely eroded thanks to the end of Glass-Steagall. Right now, if you get a savings account, even at a credit union, you’re not going to get more than 2.5% in either a savings account or a CD. That’s much, MUCH lower in commercial banks, with savings accounts there not hitting over 1%. We’re encouraged to invest in the stock market via IRA and the like, but the stock market is becoming far more volatile, meaning more people are going to lose their savings over and over again. That’s not the way to ensure a healthy savings at the end of a working life, going through for-profit enterprises who do all they can to pilfer from you.
So, reform SS, sure! Let’s do it to make sure it’s more fair and equitable. Getting rid of it will be a disaster for most of America, who do not have the means or access to navigate the complex world of privately own banking to set up an effective savings account. A government run program, that does not have a profit motive driving it remains the most effective way to help the vast majority of Americans save money.
Absolutely. We here in Germany invented social security, along with statutory health insurance, and for us it is difficult to understand how an otherwise civilised country like the USA can be as backward in those areas as it is.
Have you not seen us?
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